D.R. Horton, Inc., America's Builder, Reports Fiscal Year 2006 Third Quarter Results.FORT WORTH, Texas Fort Worth is the fifth-largest city in the state of Texas, 18th-largest city in the United States[1], and voted one of "America’s Most Livable Communities. -- D.R. Horton Horton, river, c.275 mi (440 km) long, rising in a lake N of Great Bear Lake, Northwest Territories, Canada, and flowing NW to Franklin Bay, a part of the Beaufort Sea. , Inc., America's Builder (NYSE NYSE See: New York Stock Exchange :DHI DHI see dairy herd improvement. ), the largest homebuilder in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Thursday Thursday: see week. (July July: see month. 20, 2006), reported net income for the quarter ended June June: see month. 30, 2006 of $292.8 million ($0.93 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share), compared to $371.7 million ($1.17 per diluted share) for the same quarter of fiscal year 2005. Earnings for the quarter ended June 30, 2006 reflect a pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta charge of $57.2 million ($0.11 per diluted share) to write off earnest money A sum of money paid by a buyer at the time of entering a contract to indicate the intention and ability of the buyer to carry out the contract. Normally such earnest money is applied against the purchase price. and pre-acquisition costs related to land option contracts. Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: revenue for the quarter increased 9% to $3.7 billion, from $3.4 billion in the same quarter of fiscal year 2005. Homes closed in the quarter increased 9% to 13,377 homes from 12,269 homes in the year ago quarter. For the nine months ended June 30, 2006, net income increased 5% to $955.6 million ($3.02 per diluted share), compared to $906.7 million ($2.85 per diluted share) for the same period of fiscal year 2005. Consolidated revenue for the nine months increased 16% to $10.2 billion, from $8.8 billion for the same period of fiscal year 2005. Homes closed in the nine-month period increased 10% to 35,838 homes from 32,550 homes for the same period of fiscal year 2005. As previously reported, net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight orders for the quarter ended June 30, 2006 were 14,316 homes ($3.8 billion), compared to 14,980 homes ($4.1 billion) for the same quarter of fiscal year 2005. Net sales orders for the first nine months of fiscal 2006 increased 6% to 41,550 homes ($11.4 billion), compared to 39,282 homes ($10.9 billion) for the same period of fiscal 2005. The Company's backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. of homes under contract at June 30, 2006 increased 4% to 24,956 homes ($7.4 billion), compared to 23,916 homes ($7.0 billion) at June 30, 2005. Donald Donald (Domnall, Domhnall, Dumhnuil, Dónall) is an anglicized version of a Scottish or Irish Gaelic personal name, containing the elements dumno "world" and val "rule", viz. "ruler of the world". Compare Dumnorix. R. Horton, Chairman of the Board, said, "Our people have worked very hard to achieve these results during a time when selling conditions are very difficult in the homebuilding industry. We have experienced a changing home sales environment since the beginning of the calendar year, which became more evident during our third quarter. As we indicated when we reported our net sales orders last week, the current home sales environment is characterized char·ac·ter·ize tr.v. character·ized, character·iz·ing, character·iz·es 1. To describe the qualities or peculiarities of: characterized the warden as ruthless. 2. by an increase in both existing and new homes available for sale, higher than normal cancellation cancellation (See: cancel) CANCELLATION. Its general acceptation, is the act of crossing a writing; it is used sometimes to signify the manual operation of tearing or destroying the instrument itself. Hyde v. Hyde, 1 Eq. Cas. Abr. 409; Rob. rates and an increase in the use of sales incentives Noun 1. sales incentive - remuneration offered to a salesperson for exceeding some predetermined sales goal bonus, incentive - an additional payment (or other remuneration) to employees as a means of increasing output in many of our markets. Due to these factors, last week we reduced our guidance for fiscal year 2006 to $3.65 per diluted share or greater (based on approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 317 million diluted shares) on approximately 50,000 homes closed." The Company will host a conference call Thursday, July 20th at 10:00 a.m. ET. The dial-in number is 800-374-9096. The call will also be webcast from www.DRHORTON.com on the "Investor Relations Investor relations The process by which the corporation communicates with its investors. " page. D.R. Horton, Inc., America's Builder, is the largest homebuilder in the United States, delivering more than 51,000 homes in its fiscal year ended September September: see month. 30, 2005. Founded in 1978 in Fort Worth, Texas, D.R. Horton has expanded its presence to include 83 markets in 27 states in the Mid-Atlantic Adj. 1. mid-Atlantic - of a region of the United States generally including Delaware; Maryland; Virginia; and usually New York; Pennsylvania; New Jersey; "mid-Atlantic states" middle Atlantic , Midwest Midwest or Middle West, region of the United States centered on the western Great Lakes and the upper-middle Mississippi valley. It is a somewhat imprecise term that has been applied to the northern section of the land between the Appalachians , Southeast Southeast or south east is the ordinal direction halfway between south and east. It the opposite of northwest. Southeast or South East can refer to: Southwest or south west may also refer to:
Portions of this document may constitute "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " as defined by the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Although D.R. Horton believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. All forward-looking statements are based upon information available to D.R. Horton on the date this release was issued. D.R. Horton does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements in this release include our expectation of fiscal year 2006 diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $3.65 or greater (based on approximately 317 million diluted shares) on approximately 50,000 homes closed. Factors that may cause the actual results to be materially different from the future results expressed by the forward-looking statements include, but are not limited to: changes in general economic, real estate construction and other business conditions; changes in interest rates, the availability of mortgage financing or increases in the costs of owning a home; governmental regulations and environmental matters; the Company's substantial debt; competitive conditions within the industry; the availability of capital to the Company on favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. terms; the Company's ability to successfully effect its growth strategies; and warranty An assurance, promise, or guaranty by one party that a particular statement of fact is true and may be relied upon by the other party. Warranties are used in a variety of commercial situations. In many instances a business may voluntarily make a warranty. and product liability claims. Additional information about issues that could lead to material changes in performance is contained in D.R. Horton's annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and most recent quarterly reports on Form 10-Q Form 10-Q See 10-Q. , which are filed with the Securities and Exchange Commission. WEBSITE ADDRESS: www.DRHORTON.com
D.R. HORTON, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended Nine Months Ended
June 30, June 30,
--------------------- ---------------------
2005 2006 2005 2006
---------- ---------- ---------- ----------
($ in millions, except per share amounts)
Homebuilding:
Revenues:
Home sales $3,277.1 $3,581.4 $8,432.9 $9,842.7
Land/lot sales 32.4 12.2 177.5 119.2
--------- --------- --------- ---------
3,309.5 3,593.6 8,610.4 9,961.9
--------- --------- --------- ---------
Cost of sales:
Home sales 2,413.7 2,788.7 6,279.8 7,400.6
Land/lot sales 17.0 6.7 105.4 46.2
--------- --------- --------- ---------
2,430.7 2,795.4 6,385.2 7,446.8
--------- --------- --------- ---------
Gross profit:
Home sales 863.4 792.7 2,153.1 2,442.1
Land/lot sales 15.4 5.5 72.1 73.0
--------- --------- --------- ---------
878.8 798.2 2,225.2 2,515.1
--------- --------- --------- ---------
Selling, general and
administrative expense 302.0 356.4 826.7 1,046.9
Interest expense -- -- -- 15.0
Other (income) (0.5) (2.9) (11.4) (13.4)
--------- --------- --------- ---------
Operating income from
Homebuilding 577.3 444.7 1,409.9 1,466.6
--------- --------- --------- ---------
Financial Services:
Revenues 60.7 74.2 156.5 206.6
General and
administrative expense 38.5 50.8 105.1 147.6
Interest expense 4.1 8.7 9.1 24.7
Other (income) (9.0) (12.8) (22.0) (40.4)
--------- --------- --------- ---------
Operating income from
Financial Services 27.1 27.5 64.3 74.7
--------- --------- --------- ---------
Income before income taxes $604.4 $472.2 $1,474.2 $1,541.3
Provision for income taxes 232.7 179.4 567.5 585.7
--------- --------- --------- ---------
Net income $371.7 $292.8 $906.7 $955.6
========= ========= ========= =========
Basic:
Net income per share $1.19 $0.94 $2.91 $3.06
========= ========= ========= =========
Weighted average number
of common shares 312.4 312.8 312.0 312.7
========= ========= ========= =========
Diluted:
Net income per share $1.17 $0.93 $2.85 $3.02
========= ========= ========= =========
Weighted average number
of common shares 318.3 315.8 317.8 316.7
========= ========= ========= =========
Other Consolidated
Financial Data:
Interest amortized to
home and land/lot cost
of sales $59.7 $60.1 $158.6 $164.5
========= ========= ========= =========
Depreciation and
amortization $12.4 $14.3 $39.2 $40.7
========= ========= ========= =========
Interest incurred $73.0 $94.1 $213.9 $275.7
========= ========= ========= =========
D.R. HORTON, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
As of June 30,
2006
---------------
(In millions)
ASSETS
Homebuilding:
Cash and cash equivalents $100.3
Inventories:
Construction in progress and finished homes 5,298.6
Residential land and lots -- developed and under
development 6,462.1
Land held for development 102.3
Consolidated land inventory not owned 142.4
--------------
12,005.4
Property and equipment (net) 130.7
Earnest money deposits and other assets 760.8
Goodwill 578.9
--------------
13,576.1
--------------
Financial Services:
Cash and cash equivalents 59.8
Mortgage loans held for sale 846.1
Other assets 77.7
--------------
983.6
--------------
$14,559.7
==============
LIABILITIES
Homebuilding:
Accounts payable $957.4
Accrued expenses and other liabilities 1,004.2
Notes payable 5,489.7
--------------
7,451.3
--------------
Financial Services:
Accounts payable and other liabilities 24.4
Notes payable 724.3
--------------
748.7
--------------
8,200.0
--------------
Minority interests 145.6
--------------
STOCKHOLDERS' EQUITY
Common stock 3.2
Additional capital 1,650.3
Retained earnings 4,656.3
Treasury stock (at cost) (95.7)
--------------
6,214.1
--------------
$14,559.7
==============
D.R. HORTON, INC.
($'s in millions)
NET SALES ORDERS
Three Months Ended June 30,
-------------------------------------------------
2005 2006
------------------------- -----------------------
Homes $'s Homes $'s
------------ ------------ ---------- ------------
Mid-Atlantic 1,453 $381.6 1,355 $330.4
Midwest 952 254.5 585 171.0
Southeast 2,346 577.3 2,186 530.4
Southwest 5,807 1,158.5 6,511 1,340.0
West 4,422 1,762.9 3,679 1,461.2
------------ ------------ ---------- ------------
14,980 $4,134.8 14,316 $3,833.0
============ ============ ========== ============
NET SALES ORDERS
Nine Months Ended June 30,
-------------------------------------------------
2005 2006
------------------------- -----------------------
Homes $'s Homes $'s
------------ ------------ ---------- ------------
Mid-Atlantic 3,753 $1,004.7 3,839 $956.9
Midwest 2,258 603.8 1,736 496.4
Southeast 6,079 1,485.8 6,455 1,595.8
Southwest 15,383 3,007.1 17,652 3,635.0
West 11,809 4,787.8 11,868 4,678.9
------------ ------------ ---------- ------------
39,282 $10,889.2 41,550 $11,363.0
============ ============ ========== ============
HOMES CLOSED
Three Months Ended June 30,
-------------------------------------------------
2005 2006
------------------------- -----------------------
Homes $'s Homes $'s
------------ ------------ ---------- ------------
Mid-Atlantic 978 $253.1 1,187 $319.4
Midwest 563 146.7 801 236.0
Southeast 1,942 447.9 2,212 529.3
Southwest 4,819 892.8 5,440 1,071.4
West 3,967 1,536.6 3,737 1,425.3
------------ ------------ ---------- ------------
12,269 $3,277.1 13,377 $3,581.4
============ ============ ========== ============
Nine Months Ended June 30,
-------------------------------------------------
2005 2006
------------------------- -----------------------
Homes $'s Homes $'s
------------ ------------ ---------- ------------
Mid-Atlantic 2,681 $671.6 3,309 $877.9
Midwest 1,418 371.2 2,068 586.1
Southeast 5,039 1,137.3 5,907 1,463.3
Southwest 13,472 2,405.5 13,810 2,728.2
West 9,940 3,847.3 10,744 4,187.2
------------ ------------ ---------- ------------
32,550 $8,432.9 35,838 $9,842.7
============ ============ ========== ============
SALES ORDER BACKLOG
As of June 30,
-----------------------------------
2005 2006
------- --------- ------- ---------
Homes $'s Homes $'s
------- --------- ------- ---------
Mid-Atlantic 2,812 $825.3 3,046 $826.7
Midwest 1,701 502.3 1,029 312.6
Southeast 4,027 1,047.0 3,684 1,040.8
Southwest 8,543 1,796.9 11,115 2,571.8
West 6,833 2,853.2 6,082 2,603.6
------- --------- ------- ---------
23,916 $7,024.7 24,956 $7,355.5
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